GroupM Chair Rebukes Short-Term TV

More addressable and programmatic advertising is inevitable.

09 November 2016

BACK

Irwin Gotlieb, the global chairman of WPP’s media arm GroupM, chastised the TV industry for short-term thinking during a sometimes fatalistic review at this year's Casbaa conference of the changes sweeping through media and advertising.

“The legacy TV business… has always allocated way too much resource to – if I’m kind – protecting its legacy position and – if I’m unkind – obstructing progress, and obstructing its chances of creating a dynamic future for itself," Gotlieb said.

The technology to implement addressable advertising on TV – for Gotlieb, an inevitable trend – has been available in the US for seven to eight years.

TV executives, however, have passed the buck to their successors, gambling with long-term sustainability for short-lived gains.

“We each have own objectives, but finding that right balance is critically important,” Gotlieb said. “I don’t think any of us are doing as good job on that as we should.”

During a wide-ranging keynote interview, Gotlieb anticipated media companies playing a wider and more active role across the marketing funnel, competing for ad dollars on their ability to deliver and demonstrate value.

At the same time, vertical integration in media will be redefined by organic and inorganic moves into the content business by ad-based tech giants such as Google and Facebook.

Google has already set up a content development team in California, Gotlieb noted.

Market power

More content plays will come from Google as well as Facebook, a prospective duopoly which vacuumed up 80% of digital ad growth in the US over the first nine months of the year.

“When I started in the business, we were dealing with television triopolies and duopolies, and we struggled for years to level the negotiating field and the dynamics of the negotiation by encouraging a level of fragmentation that changed marketplace dynamics,” Gotlieb said.

“And here we are, with a repeat of what we went through thirty years ago. It’s made a little more complicated today by the fact that these companies have become walled gardens, and are very, very protective of the data they get.”

Comcast, ostensibly an infrastructure-based business, is well placed to navigate the changes ahead, thanks to a long history of engagement with content companies by the Roberts family, the company’s controlling shareholder.

Ambitious telecom companies such as AT&T however, which is seeking to buy entertainment powerhouse Time Warner, or Verizon, which has now bid for Yahoo after acquiring AOL, may find it harder. Telco reinvention won’t be easy.

“It just depends what blood runs in your veins,” Gotlieb said.

“If you’ve grown up in a utility, you’re probably not as well equipped to deal in the world that Google and Facebook deal in as you might be," he added.

"Buying Time Warner does improve your position, of course, but does it solve your problem? No."